Nearly 5 pct of Vancouver homes deemed vacant amid housing crunch

Nichola Saminather

Published 4:56 PM ET Wed, 7 March 2018
Reuters

TORONTO, March 7 (Reuters) - About 5 percent of Vancouver homes stood empty or underutilized in a city grappling with skyrocketing home prices and soaring rents, according to data released on Wednesday, making their owners subject to a so-called empty home tax.

The western Canadian city has rolled out a raft of measures to cool a red hot market and improve housing affordability in the country's most expensive real estate market. In February, British Columbia outlined a new housing strategy, including raising its foreign buyer tax.

About 4.6 percent, or 8,481, homes in Vancouver stood empty or underutilized for more than 180 days in 2017, according to homeowner declarations submitted to the municipality.

The city received 183,911 property status declarations, representing 98.85 percent of home owners, the City of Vancouver said in a statement. Properties deemed empty will be subjected to a tax of 1 percent of their assessed value.

"This is not insignificant, considering that the rental vacancy rate is less than 1 percent in Vancouver," said Robert Hogue, senior economist at Royal Bank of Canada. "This kind of data is completely new, so it is difficult to put into context."

Foreign buyers, mainly from China, have been blamed for Vancouver's hot property market, where the gap between home values and incomes has widened rapidly in the last five years, hitting levels well above any other major Canadian city.

Before the foreign buyer tax, sales agents said investors in Hong Kong, China and other parts of Asia were acquiring up to 40 percent of Vancouver condo projects marketed abroad, absorbing the more expensive units that domestic buyers could not afford.

Nearly 61 percent of the empty homes were condos, and other multi-family properties made up almost 6 percent, according to the statement. More than a quarter of the empty properties were in downtown Vancouver.

Property owners who did not submit a declaration and those that claimed exemptions, such as for renovations or if the owner were in hospital or a long-term care facility, were included in the empty homes number.

The 2016 census reported that 21,820 homes were unoccupied in Vancouver but that included homes at which no one was available on census day, so overstates the issue, RBC's Hogue said.